S&P Global Ups India's FY24 GDP Growth Forecast To 6.4 Per Cent On Strong Demand

India GDP forecast: For FY26, the agency has kept GDP growth projection unchanged at 6.9 per cent

India’s gross domestic product (GDP) growth rate could rise to 6.4 per cent from the earlier 6 per cent, according to S&P Global Ratings forecast on Friday. However, the GDP growth estimate has been cut by 50 basis points (bps) to 6.4 per cent for FY25. The rating agency on Monday in its "Economic Outlook Asia-Pacific Q1 2024: Emerging Markets Lead The Way", said, "We have revised up our projection for India's GDP growth for fiscal 2024 (ending in March 2024) to 6.4 per cent, from 6 per cent, as strong domestic momentum seems to have offset headwinds from high food inflation and weak exports."

According to S&P Global, "Still, we expect growth to slow in the second half of the financial year amid subdued global growth, a higher base, and the lagged impact of rate hikes. As a result, we have lowered our outlook for growth in fiscal 2025 to 6.4 per cent from 6.9 per cent." It said that the fixed investment in India has recovered more than private consumer spending. However, the agency's projection is lower than the central bank's 6.5 per cent.

For FY26, the agency has kept India's GDP growth projection unchanged at 6.9 per cent.

The Union statistics ministry will release GDP data for July-September at 5:30pm on November 30 (Thursday).

On retail inflation, S&P Global said that in FY24, India is expected to log inflation of 5.5 per cent, which is under the Reserve Bank of India (RBI)'s upper tolerance band of 6 per cent. In FY25, it is expected to be lower at 4.5 per cent.

S&P Global said, "In India, there was a transitory spike in food inflation in the July-September quarter, but it appears to have had little effect on underlying inflation dynamics. Still, headline inflation remains above the RBI's target of 4 per cent, suggesting it will be a while before the rate cycle turns."